International Food Commodity Prices Dip by 2.6% in May

Gilbert Ekugbe

The Food and Agriculture Organisation (FAO) food price index has revealed that prices of commonly-traded food commodities, averaged 124.3 points in May, down 2.6 per cent from April

The FAO Food Price Index which tracks monthly changes in the international prices of commonly traded-food commodities, said food commodity prices declined amid significant drops in quotations for most cereals, vegetable oils and dairy products.

The FAO Cereal Price Index also declined 4.8 per cent from the previous month, led by a 9.8 per cent drop in world maize quotations due to a favourable production outlook along a sluggish import demand.

The FAO Vegetable Oil Price Index dropped by 8.7 percent in May, averaging 48.2 percent below its year-earlier level. International palm oil prices fell markedly from April, as protracted weak global import purchases coincided with rising outputs in major producing countries. World soyoil prices fell for the sixth consecutive month amid a bumper soybean crop in Brazil and higher-than-expected stocks in the United States of America. Rapeseed and sunflower oil prices continued to decline on ample global supplies.

The FAO Dairy Price Index declined by 3.2 percent from April, led by a steep drop in international cheese prices due mainly to ample export availabilities amid seasonally high milk production in the northern hemisphere. However, international quotations for milk powders rebounded as did those for butter. 

The FAO Sugar Price Index posted its fourth consecutive monthly increase, up by 5.5 percent from April and reaching a level nearly 31 percent higher than a year earlier. The jump reflected tighter global availabilities, rising concerns over the impact of the El Niño phenomenon on next season’s crops, and shipping delays amid strong competition from soybean and maize in Brazil. The positive outlook for 2023 sugarcane crops in Brazil prevented larger monthly price increases, as did lower international crude oil prices.

The FAO Meat Price Index also rose in May, increasing by 1.0 per cent, driven primarily by a steady high Asian import demand for poultry meat and persistent supply tightness for bovine meat in the United States of America.